WPRFU and Dreamworld court stand-off just got real
UPDATE: The Western Province Rugby Football Union’s off-field and boardroom drama just got elevated to the next level.
Dream World Investments – an associated company within the Flyt Group – on Friday filed formal papers on WPRFU in the Western Cape High Court to recover a loan amount of ZAR112-million.
This came on the same day that a letter emerged in which suspended WPRFU executive member Junaid Moerat launched a scathing attack on President Zelt Marais and one of his close confidants, Tony McKeever.
Zane de Decker, the Chief Executive Officer of Flyt Property Investment, confirmed to @rugby365com that Dreamworld filed papers to reclaim their money from WPRFU.
The latest divorce in the WPRFU boardroom follows the decision in June last year when the union’s council – made up of all 90-plus clubs – decided to back President Zelt Marais to walk away from previous deals with Remgro and Investec and accept the ZAR112-million loan from Dreamworld to repay two loans to the former companies.
At the time Marais, in a media release, called the agreement with Flyt ‘the deal of the century’.
However, for the third time in 2020, the WPRFU looked to walk away from a signed deal with a benefactor and now find themselves in what is likely to become a drawn-out and costly court battle.
De Decker told @rugby365com that the Dreamworld claim is for the initial loan amount (ZAR112-million), plus interest thereon, a raising fee of ZAR1,265-million and damages of ZAR30,156,585 (the development charge).
The interest on the loan amount is already approaching ZAR3-million.
The WPRFU President, Marais, said they are aware of the summons and said “it will be defended” by its legal team.
“We will be filing the appropriate response,” Marais told this website, in response to the latest developments.
“The union elects not to make any further comment at this stage.
“Its defence will be pleaded in due course.”
De Decker said Friday’s summons was issued by Dreamworld for the above amounts.
He added: “Flyt is also considering its position and is likely to take legal action to recover damages suffered as a result of WPRFU’s repudiation.”
With the Flyt Group still holding bonds on the various WPRFU properties as security, the union now finds itself in a vulnerable position.
De Decker added that the loan was repayable the moment WPRFU changed legal council and decided to walk away from the Flyt/Dreamworld deal.
“With the repudiation [of the deal in December], the union should have already paid back the money, but has not,” De Decker said.
“The deadlines for payment has in fact passed.
“If payment is not made before then, the court will hand down judgment in the legal proceedings,” he said of the option that WPRFU could avoid the judgement against them by just repaying the amounts.
However, according to Marais’ response, it is unlikely they will repay and would rather engage in a costly legal battle.
The possibility of this legal stand-off was first raised when WPRFU’s new legal council (Korbers Inc) wrote to Flyt back in November, claiming that the fact that Dreamworld put up the cash (and not Flyt) makes the WPRFU agreement null-and-void.
The new legal council also claim that the agreement is not valid because the properties were “undervalued”.
This is disputed by De Decker in a media release he issued back on December 10.
“It is important to point out that the land value agreed on was proposed by the WPRFU, not the Flyt Group,” De Decker said in his media release.
“This value has subsequently been incorporated into the Newlands and Brookside DevCo’s that are co-owned by the WPRFU and the Flyt Group.
“To demand that the price be increased six months after the deal has been concluded is simply outrageous.”
@king365ed
@rugby365com
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